3i shares leap after US activist investor Edward Bramson buys in

Shares in 3i, Britain’s oldest private equity group, leapt after the company disclosed that a Guernsey-based fund set up by activist investor Edward Bramson has been buying a stake.

Bramson, a secretive US investor, sent shockwaves through the staid world of asset management a year-and -a-half ago when he mounted a successful coup at F&C.

His latest investment vehicle, a cash shell known as Sherborne Investors Guernsey B or Sig B, raised £207m through a float on the junior AIM market late last year. Its backers include legendary investor George Soros.

The possibility that 3i, formerly known as Investors in Industry, might fall under Bramson’s control through an investment vehicle based in a Channel Islands tax haven is likely to provoke controversy.

3i’s highly unusual statement to the stock market of the stakebuilding sent its shares up 7.9p to 266.8p.

The private equity group said Sherborne and its stockbroker, Jefferies, had begun buying on January 2 and had acquired 1.6 per cent. 3i also drew attention to comments made by Sherborne the day after it started buying, that most of the money raised by Sig B will be used to buy up to 30 per cent of one target firm.

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The unorthodox statement by 3i is understood to be an attempt to push Bramson and Sherborne out of the shadows.

These remain shrouded in mystery. The cash in Sig B would only buy a stake of around 8pc in 3i, which is valued at around £2.5bn.

It is not clear whether the fund would be able to raise enough money to buy a 30 per cent stake or whether it wants a smaller holding and a seat on the 3i board.

The chair of Sig B, which can only invest in a single company at any given time, is Ian Brindle, a former chair of accountancy giant PwC. Bramson himself is not heavily involved as he is still executive chairman of F&C until March 14.

The timing of the move has provoked head-scratching among 3i insiders since it comes so soon after the appointment last May of new chief executive Simon Borrows, a former investment banker at Greenhill.

Borrows has embarked on an overhaul including cost-cutting and returning capital to shareholders. Rival activist investor Laxey Partners sold its stake after Borrows’ appointment.